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Three Case Studies Show How Dropping a PPO Plan Increases Profits

Practice management consultant, Bill Rossi of Advanced Practice Management, has shared some numbers for three practices that he helped guide through dropping the same large national PPO plan.  In each case (one on the East Coast, one in the Midwest and one on the West Coast), the PPO discounted fees about 30% and the PPO patients comprised about 33% of the practice.  In each case, production and collections increased in the months following the drop.  Here are the numbers:Case History #110 Months Before Drop           7 Months After Drop          Gain/MoProduction/mo                     $192,755                                   $203,487                      $10,732Collections/mo                     $112,853                                   $133,968                      $21,115Patient flow (exams/mo)            308                                           320Case History #212 Months Before Drop           6 Months After Drop           Gain/MoProduction/mo                     $84,759                                   $93,130                            $8,371Collections/mo                     $79,005                                   $93,422                         $14,417Patient flow (exams/mo)         240                                           251Case History #35 Months Before Drop               7 Months After Drop*        Gain/MoProduction/mo                     $134,645                                   $138,551                          $3,906Collections/mo                     $106,262                                   $111,323                         $5,061Patient flow (exams/mo)           268                                           249*Dr. working fewer hours this yearAccording to Rossi, these case histories are representative of his clients’ outcomes, though he is careful to say that every case is different.  In our own experience, based on informal polling of doctors who have dropped a PPO, in almost every case, they were very pleased with their decisions.  (The exceptions were unique situations such as the practice being located in a one company town, and it couldn’t handle the huge patient loss after it dropped that company’s PPO.)In each of the above cases, the patient retention has been better than the doctor and staff expected.  There is always some patient loss and some hassles as the practice goes through the transition, but even in the worst case scenario, the practice can always sign back up.  One large national dental insurer might threaten that they won’t take a practice back for two years, but Rossi believes that is probably a bluff.Given the cost of PPO participation, we’re dumfounded that more doctors aren’t taking action and renegotiating or dropping all PPOs that discount fees by 20% or more.  Fear is the likely culprit.  Every dentist is out of network with some plans, yet still manages to treat patients who have those plans.  It is definitely possible to cut back on PPOs and stay busy.It’s high time that dentists turn the tide on PPOs.  Make it a goal to peel back one or two in the coming year.  Until more dentists get proactive, PPO reimbursements will continue